Things Are Simply Worse Than the Depression
A few times I referred to things that I think gives the economy the potential to be worse than the depression.
Naked Capitalism has a post today that has a graph of debt. Relative to the depression the debt load looks to be about 40% more. Debt is what killed the economy and led to the depression and it is what is killing the economy now.
One of the major things that I have pointed out that was different during the depression is that there weren't the 30 year mortgages. Going into it mortgages were about half the time and part of what they were able to do to ease the financial strain and burden of the era was go to 30 year mortgages. In my calculations in a previous post I figured out it could save the average famil 20-25% in their monthly payment. Well, try going to 40 year mortgages and you only save 6%. It simply isn't enough to make any material difference. It is a non-existent tool for this round.
30 year mortgages became a standard thing, but they really are bad thing and should be outlawed except for emergency hardship times. Mortgages should be 20 years and available for 25 years at a premium insurance rate.
And the mortgages out there right now aren't properly matched to long term money. That is just a second enormous disaster about the debt. Short term rates go up and hurting gets really big and constant for the banks.
The thing in common that all the dire economic outcomes/collapses had in common was unmanageable debt. I can not look at the graph and come up with a justification as to why things would not be worse than the depression.